Far Eastern investors have announced a deal that will see the Queen Elizabeth
2 ocean liner saved from the scrap yard.

The agreement will see the former Cunard vessel refitted as a 500-room luxury hotel, with Hong Kong or Singapore its likely home. It also ends the long-running saga about the future of the ship, which was sold to the government conglomerate Dubai World for £64 million in 2008.

Initially the owners had hoped to transform the ship into a lavishly-appointed 1000-room hotel, but the global financial crisis saw the proposal shelved. Last July new plans for a 300-room hotel, which would see many of the ship’s original features maintained, were revealed.

The new deal, a joint venture, involves the Oceanic Group, based in Singapore. The firm will loan the ship from Dubai World for around $1 million a year, with the option to buy it outright for around $35 million after 10 years.

“The Queen Elizabeth 2 is starting the next exciting journey of her long and illustrious career," said Mr Daniel Chui, managing director of Oceanic Group.

“Our vision is for [the ship] to become a landmark cultural and tourist attraction – a beacon of luxury, glamour, quality and tradition - in the heart of a leading Asian city that shares her rich maritime heritage and is prepared to give this very special ship the prominent waterfront home she deserves."

The renovation will see a maritime museum, a shopping mall, and several restaurants fitted, he added.

The QE2 was launched in 1969 by the Queen, making its maiden voyage from Southampton to New York. It was operated for nearly 40 years by Cunard, and was used to carry troops to the south Atlantic during the Falklands War.